The Canadian Competition Bureau has initiated a lawsuit against Google, alleging anticompetitive behavior within its online advertising sector. This ongoing investigation, dating back to at least 2021, accuses Google of leveraging its dominant market position to stifle competition. The bureau's allegations focus on Google's substantial market shares across various components of the digital advertising landscape. Currently, the case is under review by the Competition Tribunal, a quasi-judicial body tasked with addressing such disputes.
Google's influence in the digital advertising industry is significant, holding approximately 90% of the market share in publisher ad servers, 70% in advertiser networks, 60% in demand-side platforms, and 50% in ad exchanges. The Competition Bureau contends that this dominance has allowed Google to engage in practices that suppress competition, curb innovation, elevate advertising costs, and reduce revenue for publishers. As part of its legal action, the bureau demands that Google divest its DoubleClick for Publishers and AdX businesses.
In response to these allegations, Google denies any abuse of market power. The company maintains that the advertising technology industry remains competitive and innovative. Google points to its competitors, including Microsoft, Meta, and Amazon, as evidence of a vibrant and challenging marketplace. Furthermore, Google argues against the penalties proposed by the bureau, which include a fine equal to three times the benefit derived from the alleged anticompetitive practices or, if undeterminable, three percent of Google's worldwide gross revenues. Google asserts that such penalties are unconstitutional.
"The very threat of such a fine will diminish or negate the incentives of Google, Google Canada and many other businesses to invest and innovate, thus undermining consumer welfare," a statement from Google's representatives highlighted.
The Competition Bureau's claims also include assertions that Google's market share has not only declined over time but that the overall industry output has increased significantly. This trend is accompanied by improvements in service quality and stable or declining prices for ad tech services.
"Google's share of the relevant market has declined over time while industry output has increased dramatically, quality of service has improved and prices associated with the ad tech services in question have remained stable or declined," according to Google's defense.
Additionally, Google challenges the bureau's assessment of the markets it allegedly dominates, suggesting that the analysis lacks a connection to commercial realities or sound economic and legal principles.
"The markets 'in which Google is alleged to have abused its dominant position are untethered either to commercial reality or to proper and sensible economic and legal analyses,'" Google's argument further elaborates.
